Deltic Confirms Gas in North Sea's Selene Prospect

North Sea-focused investing company Deltic Energy Plc has confirmed the presence of gas at the Selene prospect in the United Kingdom (UK) Southern North Sea.

The Shell plc-operated 48/8b-3Z well reached its total depth of 11,614 feet (3,540 meters) True Vertical Depth Sub Sea (TVDSS) and proved a 524.9-foot (160-meter) thick section of Leman Sandstone. The top of the Leman Sandstone was encountered approximately 230 feet (70 meters) deep to prognosis with elevated mud gas readings, confirming the presence of gas, observed throughout the reservoir interval and into the underlying Carboniferous basement, Deltic said in a statement.

Subsequent wireline logging and fluid sampling have confirmed the presence of a live gas column above a gas-water contact at approximately 11,056 feet (3,370 meters) which is in the middle of the B-Sand, the key producing interval within the overall Leman Sandstone section. Updated post-well structural maps of the Selene prospect point towards a maximum gas column of around 328 feet (100 meters).

Deltic said that initial indications point towards high-quality dry gas, typical of production from adjacent fields, with no reported hydrogen sulfide (H2S).

Based on the preliminary information available from the wellsite, Deltic has updated its volumetric model of the Selene discovery and now estimates Selene to contain gross P50 estimated ultimate recoverable (EUR) resources of 131 billion cubic feet (bcf) (P90-P10 range of 95 to 176 bcf) which is at the lower end of pre-drill estimates.

“However, the bulk of the recoverable resources are concentrated in the higher quality B-Sand up-dip from the 48/8b-3Z well location which should support a simpler and cheaper development option with greater gas production per well than was envisaged pre-discovery,” Deltic added.

Following the demobilization of the rig, which is expected towards the end of next week, Deltic said there will be a period of detailed analysis of wireline data, core samples, fluid samples and pressure testing data which will further refine the geological model, volumetric estimates and the proposed development plan.

Based on the results of the well and the data collected, Deltic believes that the joint venture (JV) should be well placed to progress towards field development planning and a final investment decision on a future development without requiring a further appraisal well.

In addition to Selene, Deltic will re-evaluate the Endymion prospect, located on the northeastern corner of the block, which is another low-risk Leman Sandstone opportunity that could be tied into any future Selene development.

As the JV updates the development plan Deltic will re-assess its economic models. Pre-drill modelling indicates that volumes over 100 bcf recoverable will remain economically viable, and ultimately produce material positive cash flows for the company, it said.

Deltic CEO Andrew Nunn said, “Subsurface expertise lies at the heart of the Deltic equity story and remains central to the strategic approach we recently laid out for the Company. In this context, the outcome of the Selene well is a good result overall and extends Deltic's exploration success record to two from two. Although we are predicting recoverable volumes at the lower end of pre-drill estimates, the improved quality of the B-Sand and increased resource concentration should support a simpler development with enhanced economics due to reduced CAPEX and OPEX requirements”.

“We are looking forward to engaging with Shell and Dana as we work through the customary post-well analysis and preparation of a plan which will move the Selene discovery towards development over the coming year. We continue to believe that the asset can create material value for our shareholders,” Nunn added.

Deltic has a 25 percent working interest in the Selene license, located in the heart of the long-established Leman Sandstone gas play in the Southern North Sea.

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